HUD trial becomes a replay of 1980s Ex-aide Dean goes on stand


WASHINGTON -- Everything about former housing aide Deborah Gore Dean -- her imposing blond presence, her monied pedigree, her ambition, her alleged crime of influence-peddling -- came to symbolize the most unforgiving portrait of the Reagan years.

Yesterday, four years into the government's investigation into abuse and mismanagement at the Reagan administration's Department of Housing and Urban Development, Ms. Dean, the designated villain of the HUD scandal, took the stand in her defense in U.S. District Court as the vestiges of those gilded days played out like familiar old tunes.

Ms. Dean, who's expected to be cross-examined either late today or tomorrow, described a HUD operation in which she, as a chief aide to HUD Secretary Samuel R. Pierce Jr., did her job as she was instructed to do, running political interference for the secretary, but leaving all funding decisions to him.

"He ran the department," she said yesterday as the trial entered its fourth week. "He ran the whole thing."

Hailing from one of Maryland's most prominent Republican families -- and also a second cousin once-removed to Vice President Al Gore -- Ms. Dean, 38, has been accused of steering millions of dollars' worth of federal housing contracts to favored developers and consultants, accepting an illegal payment and lying to Congress about her role in HUD programs, one in Baltimore.

The prosecutors contend that Ms. Dean helped line the pockets of several GOP consultants -- including former Attorney General John N. Mitchell, who lived with her mother and whom she called "Dad" -- hoping they'd help advance her career.

"This case is about power and how it can corrupt," prosecutor Robert O'Neill told the jury at the start of Ms. Dean's trial for conspiracy to defraud the government and perjury. Ms. Dean says she is innocent of each of 12 felony charges she faces, admitting that the process for funding particular housing projects was highly political, often even "slimy," but that she did nothing illegal and has been made a scapegoat in a government mess that resulted in $2 billion in losses.

"She didn't lie. She didn't cheat. She didn't steal," said her attorney, Stephen Wehner.

Yesterday, Ms. Dean said that as executive assistant to Mr. Pierce, she was routinely lobbied by hundreds of senators and congressman, mayors, consultants and developers who sought funds for projects in their states, receiving between 20 and 40 such phone calls a day.

Ms. Dean believes Arlin M. Adams, the independent counsel who already has secured 10 convictions in the HUD fraud and waste probe, is merely going after her so she'll help the government build a case against Mr. Pierce. The former secretary has not been indicted but is still under investigation. He has not been subpoenaed to testify in Ms. Dean's case since it is assumed he would plead the Fifth Amendment.

Both Mr. Pierce, described by many former HUD employees as disengaged when in charge of the agency, and Ms. Dean refused to testify before a House subcommittee investigating the scandal in 1989.

High-style defendant

In stylish, yet conservative dress, Ms. Dean has often appeared more like a vivacious hostess than a defendant in a criminal trial facing up to 57 years in prison and $3 million in fines.

During the proceedings, she often laughs, shakes her head in disbelief, waves to friends who've come to watch and speaks frequently to the two relatives who've sat behind her day after day: her aunt, Louise Gore, the former Maryland legislator who ran for governor against Marvin Mandel in 1974, and her uncle, James Grafton Gore.

The loquacious defendant says in an interview the trial has been a breeze compared with the early days of the scandal, when "I didn't want to go to the grocery store. I didn't want to go to the dry cleaners. I ordered in a lot of food."

Back then, the daughter of Mary Benton Gore Dean and the late Gordon Dean, a prosecutor at the Nuremberg trials and chairman of the Atomic Energy Commission in the Truman administration, heard her own giant sucking sound as friends and colleagues headed for the hills.

The consulting business she had started upon leaving HUD in 1988 dried up. Eventually, she opened an antiques store in Washington called "The Proud American," and last June, with Mr. Pierce in attendance, married a longtime friend from Georgetown University, Richard "Spider" Pawlik, a mental health counselor.

In the past several weeks, Ms. Dean has listened as a parade of former colleagues and friendswalked to and from the witness stand without ever meeting her eyes.

Jurors have heard of million-dollar deals, lunches at expensive restaurants, a phone call here, a letter there to make the money move.

The first charge against Ms. Dean is the one she calls a "personal tragedy" for her. She is accused of improperly funneling HUD funds for the rehabilitation of apartments to certain developers -- -- at the request of John Mitchell, who earned $230,000 acting as a go-between.

Ms. Dean maintains the projects pushed by Mr. Mitchell were funded before she got to HUD. What's more, she says, neither she, nor her mother had any idea that her mother's companion was profiting from such maneuvers until after the Nixon administration official's death.

"It hurt like hell," says Ms. Dean, whose mother is ill, but attended yesterday's session in a wheelchair. If the Mitchell count is the most personally hurtful, a charge that she accepted $4,000 from a GOP consultant who'd obtained HUD benefits with her help is perhaps the most difficult legal web for her.

Ms. Dean admits she accepted a $4,000 check from Lou Kitchin, a former Reagan and Bush strategist, but says it was for antique furniture Mr. Kitchin had asked Ms. Dean to buy for him and denies that she pulled any strings for the consultant at HUD.

Still, she admits she exercised "bad judgment" in accepting the check.

Ms. Dean is also accused of lying to the Senate Banking Committee in 1987 after being nominated as assistant secretary for community planning and development. At the time, she denied any knowledge of a project called Baltimore Uplift One -- slum housing throughout Baltimore that Republican consultants like Reagan aides Robert I. Tuttle and Lyn Nofziger invested in and then dumped, having persuaded HUD to send millions to the city to take the deteriorating rowhouses off their hands.

Ms. Dean, whose nomination was withdrawn as word of fraud and influence-peddling at HUD started getting out, stands by her 6-year-old Senate testimony.

"I didn't lie," she says.

Fall of a family

In some ways, the family's fortunes have mirrored Ms. Dean's fall from powerful official to government untouchable.

The Gores' historic Potomac mansion, Marwood -- the site of political fund-raisers for everyone from 1968 presidential candidate Richard M. Nixon to 1988 presidential candidate Al Gore -- is still home to Louise and James Gore and Mary Gore Dean. But a souring real estate market in the mid-80s put the family's real estate holdings -- including Marwood and its 176 surrounding acres -- in bankruptcy.

And Ms. Dean, whose grandfather, H. Grady Gore, was a real estate tycoon and a key figure in Maryland Republican politics, says she's spent her inheritance -- close to $700,000 -- on legal fees.

But she wanted to proceed with a trial, against her mother's advice, instead of pleading guilty as other former HUD officials have done. "I wanted to set the record straight," says Ms. Dean.

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